Spotify mogul Daniel Ek onstage during the "Now Playing" Creator Day on November 13, 2024 in Los Angeles. Presley Ann/Getty Images Share on Facebook Share on X Share to Flipboard Send an Email Show additional share options Share on LinkedIn Share on Pinterest Share on Reddit Share on Tumblr Share on Whats App Print the Article Post a Comment Logo text On Spotify, indie music fan Genevieve Capolongo combed the platform for lesser-known musicians outside the mainstream, like Próxima Parada, Julia Cooper, and Brusco. But despite her listening preferences, all that was recommended to her was major-label tracks from Drake, Zach Bryan and Justin Bieber. How those songs landed on her playlists points to what's becoming an increasingly contentious issue for the streaming giant: an alleged pay-to-play regime that favors some producers and labels to the detriment of users who believe they're being recommended tracks personalized to their listening history. And now, a class action has been filed against Spotify for allegedly bamboozling consumers. Related Stories Lifestyle Cher Gets Candid About Aging: "I Hate It" Music Lily Allen's 'West End Girl' Spotify Streams Doubled Week After Release Day The lawsuit, filed in New York federal court on Tuesday, brings claims for deceptive practices and false advertising, among others. It seeks unspecified damages and a court order blocking Spotify from dealing in paid arrangements to dictate playlist and recommendations placement and requiring it to disclose when songs are influenced by promotions. Spotify has emerged as one of the primary channels through which listeners discover new music. It offers two types of playlists: editorial, which are hand-curated by tastemakers at the company, and algorithmic, generated through the company's recommendation engine. Both wield immense influence. Inclusion on a flagship list, like Rap Caviar, instantly exposes an artist to millions of potential listeners actively looking for new music. It's a lucrative opportunity. Placement on Today's Top Hits has been estimated to boost streams by nearly 20 million, generating up to $163,000 in royalties. Placement of a song can cost between $2,000 for playlists with modest followings and up to $10,000 for the largest, claims the lawsuit, pointing to media reports. Other payments are disguised as "consultancy fees" of $100 to ensure editors hear a track. Under this regime, independent artists without major-label backing are at a disadvantage, according to the complaint. Major label tracks appear on Spotify's most popular playlists at a disproportionately higher rate because they're amplified by recommendation engines, per a study on how labels impact music recommendations. Their dominance stems from labels controlling vast music catalogues that streaming platforms need to survive, the lawsuit says. Through these licensing deals, labels can extract concessions, like preferential algorithmic placement. The pay-for-play regime was further cemented in 2020 when Spotify introduced its Discovery Mode, which allows artists to boost the visibility of certain tracks on algorithmic playlists in exchange for reduced royalty rates, the lawsuit claims. Under this system, participants pay with lower-per-stream payouts instead of cash up front. It's long-been one of the company's most controversial features among industry insiders, with critics likening the feature to the radio payola scandals that marred the music industry before the streaming era, where record labels would pay radio stations for spins without the stations disclosing payment. Drake appeared to reference Discovery Mode in his defamation lawsuit against UMG over the distribution of "Not Like Us," criticizing his label for taking fewer royalties in exchange for increased plays. Back in 2021, the House Judiciary Committee had requested information on the program, pointing to concerns that the feature may "set in motion a 'race to the bottom' in which artists and labels feel compelled to accept lower royalties as a necessary way to break through an extremely crowded and competitive music environment." Important to note: listeners aren't told when a track has been promoted through this program. The lawsuits alleges that this creates the "false impression of neutral, personalized recommendations when financial incentives are quietly driving the algorithm." In a statement, Spotify called the allegations "nonsense." It added, "Discovery Mode is a feature artists can use to flag priority tracks for algorithmic consideration in limited contexts: Radio, Autoplay, and certain Mixes. It doesn't buy plays, it doesn't affect editorial playlists, and it's clearly disclosed in the app and on our website." The company stressed that the lawsuit gets "basic facts" incorrect, stating that it incorrectly suggests Discovery Mode is used in all algorithmic playlists. Spotify also refuted that the program only helps major label artists, contending that the feature is popula